Coercive Capital: The Corruption Continuum - Scott Greytak & Casey Michel

In the 1970s, corruption in the U.S was often not considered a problem. Or it was viewed as a problem that happened “over there”.... in other parts of the world. But in retrospect, the reality and our perception of corruption has changed.   And even though anti-corruption legislation like the Foreign Corrupt Practices Act was implemented to help combat the issue, corruption continues and grows in ways that no one could have predicted. 

Kleptocrats around the world are uniting to attack us- in Russia, China, Venezuela, North Korea, and Iran- use their power to attack their neighbors, and destabilize the global economy… allowing dictators and criminals to leverage our own system against us – hiring lobbyists, lawyers, and corporate service agents to influence our elections, buy off our politicians, move dirty money, compromise our economy, and weaken our resilience.

To help understand the urgency of these new risks and the tools needed to protect America, democracy, and, maybe, the world, Coercive Capital host Elaine Dezenski speaks with Scott Greytak, the Director of Advocacy of Transparency International US, and Casey Michel, Director of the Combating Kleptocracy Program at the Human Rights Foundation.

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Episode Transcript

Speaker 1 (00:00):
Today's podcast is supported by Winston and Strong LLP. Winston
and Stron, a trusted legal advisor and advocate for clients
across virtually every industry. Coercive Capital is proudly supported by Hummingbird.
Hummingbird is a modern compliance platform designed to make financial
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(00:23):
criminals are sophisticated, savvy, and agile, meaning the tools used
to fight them should be too. Learn more at hummingbird
dot Co. Welcome to Coercive Capital. I'm Elaine Dezenski. In

(00:45):
nineteen seventy seven, the United States passed seminal and consequential
anti corruption legislation, the Foreign Corrupt Practices Act. The FCPA
fundamentally changed the way that companies, countries, and citizens view
corruption by outlawing US citizens and entities from bribing foreign
government officials to benefit their business interests. But corruption in

(01:07):
nineteen seventy seven looked radically different than it does today.
In the seventies, corruption was often viewed as a problem
over there in other parts of the world. Many companies
here in the United States considered corruption to be an
economically productive way to address investment challenges. In poor governance countries,
but the FCPA had a tremendous impact, giving rise to

(01:30):
a sea change within the private sector, giving birth to
compliance departments and awareness of the importance of transparency and
mitigating risks from third party agents. Despite some progress, however,
corruption has continued to evolve. It has grown into something
even more toxic, what has been described as strategic corruption,
the weaponization of corruption by states to further geopolitical objectives.

(01:55):
Corruption is no longer only over there, it's everywhere. Authoritarian
regimes in Russia, China, Venezuela, North Korea, and Iran use
their power to attack their neighbors and destabilize the global economy,
allowing dictators and criminals to leverage our own systems against US,
hiring lobbyists, lawyers, and corporate service agents to influence our elections,

(02:18):
buy off our politicians, move dirty money, compromise our economy,
and weaken our resilience. Simply put, corruption puts democracy in danger.
Collaptocrats around the world are uniting to attack us, and
the FCPA is no longer enough. New threats require new tools,
like exposing the beneficial ownership behind anonymous shell companies, requiring

(02:42):
financial gatekeepers, including financial advisors and real estate professionals to
conduct basic due diligence. With new Treasury regulations to bolster
the Bank Secrecy Act, the passage of the Corporate Transparency
Act and the Foreign Extortion Prevention Act in recent years,
we may be moving in the right direction, but more
needs to be done to help us understand the urgency

(03:04):
of these nu risks and tools we will need to
protect America democracy and maybe the world. I spoke with
two experts and two of the smartest people I know
on anti corruption. Scott Graytek is the Director of Advocacy
of the NGO Transparency International US, where he oversees its
anti corruption policy lab Over the last few years, Scott

(03:25):
has been recognized as one of the top lobbyists in DC,
and I mean the good kind of lobbyist. Casey Michelle
is the director of the Combating Leptocracy Program at the
Human Rights Foundation. He's also written two illuminating books on
the matter, American Kleptocracy, which examines American facilitators of illicit finance,
and the recently published Foreign Agents, which shines a light

(03:47):
on the dangerous influence of foreign actors into spotic regimes
that undermine our democracy, Scott, I'm going to kick it
off with you. The last five years, we've seen a
remarkable increase in bipartisan anti corruption legislation and on the
regulation side, the Corporate Transparency Act, the Foreign Extortion Prevention Act,

(04:09):
new restrictions on the foreign influence foreign influence, the so
called cardon Rische Rule, and the Biden administration's new Fensen
rules on real estate and investment advisors. It's early still,
and the courts are still weighing in on the limits
of the CTA in particular, But what do you think
the impact of these laws will be in a decade
or two?

Speaker 2 (04:28):
Thanks, Ellenne. I think it really is a moment in
time for the United States. You mentioned the Foreign corpt
Practices Act that was largely an outgrowth of the Watergate scandal. Essentially,
when investigators began digging into how the Nixon Whitehouse was
able to get so much illegal campaign contributions, including from

(04:49):
some major US corporations that were doing business overseas. They
basically found in those corporate records that these employees of
the US companies were giving huge bribes to both allies
and adversaries overseas in order to grow their profits. And
arguably American influence. So it's funny that when scandals happen,

(05:13):
anti corruption reforms tend to come, we hope as a
consequence of those as a silver lining. But the issues
that we're talking about today weren't driven by scandals mostly
and certainly not by domestic scandals in the United States.
They were instead, I think, brought together through a lot
of hard work toward bringing together coalitions that maybe didn't

(05:35):
realize that these issues were important to their portfolios. So
the hard nuts and bolts shoe leather of having conversations
across the political aisle, across the interest groups and constituencies,
that's a big part of it. But I think it's
also understanding that as the United States and its allies
geopolitical role is being threatened to maintain and to grow

(05:56):
their influence not only in their own countries but third
party developing countries often around the world, then this can
give the United States and its democratic allies a much
larger global strategic advantage. And I think that that also
helps explain a lot of across partisan support for the
reforms you've mentioned.

Speaker 1 (06:16):
Yeah, absolutely, do you think FIFA, the Foreign Extortion Prevention
Act is really the next FCPA in terms of its impact,
or are we looking at something that is more limited
in terms of how it impacts the playing field?

Speaker 2 (06:32):
I would say, you know, I would call the question
for any American criminal law that has greater potential than FIBA.
I don't know of any American criminal law that has
the potential scope and you know, list of future inditees
and defendants as this law, most American criminal law is

(06:54):
applied to the three hundred and forty million or so
Americans in the United States. FIFA, or a Foreign Extortion
Prevention Act, gives the US Department of Justice the power
to go after any official, any employee, any state owned
entity in the entire world that asks for or receives

(07:15):
a bribe from an American, from an American company, from
any company listed on American stock exchange like the NASDAQ
or the New York Stock Exchange. We are talking about
a law. And given the prevalence of corruption around the world,
my company, Transparency International, does an annual survey of perceptions
of corruption. Those results show that two thirds of countries

(07:37):
in the world are dealing with serious levels of corruption.
The potential pool of criminal actors here is massive and
that authority is so broad, I challenge folks to think
of a broader US law, especially one that carries fifteen
years of imprisonment and significant fines like the FIFA. So

(08:01):
I think it has a potential game changer. It comes
down to political will, right. We've heard from our chapters
all around the world that they need this. Our chapter
in Venezuela talks about how their high level prosecutors can't
go after senior level officials, only low level corruption because
that would upset the regime there. Our chapters in Africa
tell us a similar story. The Middle East and Lebanon,

(08:22):
our chapters support of this, told a similar story. So
we know that the world needs this. We know that
the United States has the capacity. The folks who will
be implementing this are the very same folks who enforce
the Foreign corupt Practices Act of the DOJ.

Speaker 1 (08:36):
They have the.

Speaker 2 (08:36):
Experience, they have about fifty attorneys who work on these
It really comes down to political will and prioritization. And
I will certainly be doing what we can from our
end to keep close eyes on that in oversight to
make sure that they use them this law as much
as they can. And we don't go as we do
with the FCPA decades by that actually bringing enforcement actions.

Speaker 1 (08:57):
Yeah, that's a really good point. We have an opportunity
now with FIPA to set I think a bit of
a new standard around enforcement, how we use these tools,
how we work with with allies and partners to make
sure that these laws are as impactful as they need
to be. What do you think are the most important
steps that the government DOJ in particular should take to

(09:21):
make sure that they're often the right footing when it
comes to FIPA prosecutions and enforcement.

Speaker 2 (09:28):
Casey, I saw you with an idea. Did you want
to jump in there?

Speaker 3 (09:30):
No, Look, I just wanted to hop in briefly to
echo everything that Scott has obviously been saying. Not only
are the bipartisan side so many of these solutions FIFA
included coming from a place of bipartisan support, but Scott,
as you just alluded to, when the FCPA was first
introduced in nineteen seventy seven in Atlanta, as you mentioned,
being an extremely progressive, pro transparency, pro business piece of

(09:53):
legislation that placed the United States of America as the
very clear leader in this broad or anti corruption, anti
transnational corruption space. That is all perfectly, perfectly true, and
we have seen the success of the FCPA not only
the prosecutorial side, but also on the kind of imitation
side of other governments implementing their own versions of it.

(10:15):
But as Scott mentioned a moment ago, it was a
long time. It was decades before we saw real true
enforcement for what the FCPA actually was and how the
FCPA could live up to it to its potential.

Speaker 2 (10:28):
Now.

Speaker 3 (10:28):
Of course, that pattern of a piece of legislation, a
piece of regulatory reform, being introduced and then being effectively
forgotten or at least certainly unused for years, if not decades,
that is a theme in the United States of America's
historic approach. Of course, in Lane, you and I spoke
just the other day about things like the Foreign Agents
Registration Act, which you might talk about later, which was

(10:49):
on the books for decades without any kind of real enforcement.
I'm all, I'm just echoing what Scott mentioned Togo that
a moment ago, that we do have the expertise for FIPA,
we do have the political will for FIFA, and thankfully
we have folks like Scott on the ground willing to
keep folks feet to the fire. To make sure it
is actually enforced, because we cannot afford to wait decades

(11:11):
with SCPA nearly thirty years before we saw the real
true enforcement of what was a game change of a
piece of legislation, just as FIFA is now.

Speaker 1 (11:20):
Yeah. Absolutely, thanks for jumping in there. Maybe I'll ask
you both then to comment on what do you see
next in terms of the pipeline for potential legislation and regulation,
both aspirational ideas that might need to build over time,
or ideas, for example, the Enablers legislation, which has been

(11:43):
discussed for a while now, that could with some additional support,
move from idea into law.

Speaker 2 (11:51):
Yeah, Elaine, I think you said it. I mean the
Enablers Act is still the highest on the must do
for the United States. The main financial transparency and accountability
organization in the world, the fat IF, the Financial Action
Task Force, put out a review of countries this summer

(12:11):
and how they regulate their enablers. These are lawyers, accountants,
financial service providers, wealth managers, you know, registered agents. These
intermediaries that are essential for criminals, including corrupt officials, when
they want to move and hide their money overseas. Often
in the United States. These are the go to service

(12:32):
providers for these criminal networks. They do not have to
ask you if a company client walks into their office,
who's actually behind that company. They don't have to do
any due diligence to say if the owners of that
company are under indictment for corruption in a foreign country
or otherwise. They don't have to flag any suspicious transactions

(12:53):
or financial activity that that client may ask them to do.
And it has been identified for decades now as the
biggest loophole in the United States anti money laundering and
anti corruption framework. So just this summer, the fat have
put the United States at dead last tied, I believe
with China in our ability to regulate these enablers in corruption.

(13:17):
So this law came within one key vote of being
adopted in twenty twenty two with a large shot in
the arm, an important boost because of Russia's invasion of
Ukraine and how so many Russian oligarchs were hiding their
assets in the United States by using these enablers. We
think that in twenty twenty five we've got a real

(13:37):
opportunity to take the huge and deep bipartisan coalition that
supported it last time around and finally get it over
the top. So that is certainly going to be the
top priority I believe for the anti corruption community next year.

Speaker 3 (13:49):
And I'll flag to pick up everything that Scott just
said out of the executive branch as well. There are
a broad array abroad, constellation of potential solutions, and for
whichever administration comes in after the November election, we've already
seen in the past few months executive action or executive
rulemaking apparatus directed at finalizing the rules and requirements for

(14:13):
some of these enablers that Scott just mentioned a moment ago,
including most especially real estate agents and those involved in
real estate closings, as well as the private investment sector,
the private actory, hedge fund and venture capital sectors. Both
of those sectors have enjoyed effectively decades long exemptions from
very basic anti money laundering requirements, those that things like

(14:39):
American banks have been subject to four years and years.
Ever since the early two thousands and the passage of
the Patriot Act and the anti money laundering provisions therein,
we have known about the role of the American real
estate sector. We have known about the role of the
American private investment sector for years of not decades, at
this point, Scott just mentioned Russian oligarchs and other proxies

(15:01):
for the Kremlin. That is but one example of many,
whether it is out of China, Iran, Venezuela.

Speaker 2 (15:08):
You name it.

Speaker 3 (15:08):
If there is a malign kleptocratic regime, the odds are
extremely good that they have used and abused the American
real estate and or private investment sector to their benefit.
And thankfully we have within the writ of the executive
branch of the ability to form these new rules as
it pertains to basic anti money laundering requirements, basic due diligence,

(15:31):
so that that loophole, that decades long loophole can finally
be closed and these industries can stop acting as a
sponge for so much illicit wealth from around.

Speaker 2 (15:41):
The world just to pick up on that. So these
rules are going to be going into effect next year,
which is a huge positive development. Think about how those
who are in Vladimir Putin's or been and helped keep
his regime in power. O Lake Deripaska reportedly owns a
mansion down the street from me and Watch in DC
that was able to be acquired through a USL company.

(16:06):
Romata Ramovich, another Russian oligarch, was able to move a
billion dollars into the United States through an investment advisory
firm in New York State. This is how these regimes
stay in power. And the fact that these rules are
now going to be on the books, as Casey said,
cuts off two really important channels of illicit finance and
support for corrupt regimes. I also just say, just so

(16:29):
folks get a sense of how genuinely bipartisan these reforms
have been. The Corporate Transparency Act, as Elaine you mentioned,
sets up the first beneficial ownership database in the United States.
It requires companies to report their true owners a certain
subset of companies in the United States that are high
risk for money laundering. This was supported from everybody from

(16:50):
Exxon Mobile to Friends of the Earth Right to the
Fraternal Order of Police and the NAACP to Representative Carolyn Maloney,
former representative from New York State who was also impeaching
and you know, doing the impeachment activities against President Trump,
whose Treasury administration supported the Corporate Transparency Act about as

(17:12):
broad as you could get. The Foreign Extortion Prevention Act,
supported by the US Chamber of Commerce and Greenpeace and
a whole host of folks in between the Enablers Act
supported by everybody from the Republican Study Committee to former
Secretary of State Mike Pompeo, Laura Ingram to you know,

(17:32):
over eighty labor, social justice, racial justice, and environmental organizations,
who's who of progressive political support. So we're going to
maintain that coalition. We believe that these issues hit a
real sweet spot and moment of opportunity and otherwise very
polarized political environment we're living in. But just to give

(17:53):
some details on that, these are genuinely bipartisan. It is
just a matter of making them a priority and harnessing
political will.

Speaker 1 (18:01):
Yeah. Absolutely, And you know, this is progress that ten
years ago we would have thought would be impossible to achieve.
And I do think, you know, part of this is
the convergence of the more traditional aspects of going after uh,
you know, the corruption challenge with this overlay of national

(18:22):
and economic security, and making the connections between how rogue
regimes are influencing America's democracy and other democracies using tools,
using strategic corruption in new ways, exploiting these loopholes that
we've known about for forever really but haven't haven't taken

(18:45):
the real action to close so I think, you know,
it's this combination of the interconnected nature of these threats,
but also the ability to really look at ourselves and
the systems. Uh. You mentioned the US ranking rather low
on one part of the fat of review, and you know,
we should really be taking that to heart, because it

(19:06):
is within our power to change this dynamic and it
will be an amazing shift to have, you know, this
combination of enablers legislation plus beneficial ownership plus FIFA that
is truly truly game changing.

Speaker 3 (19:23):
Yeah, Eleant, if I can just hop in, I think
what you mentioned a moment ago that ten years ago,
we would of course not be having these conversations, let
alone be anywhere near nearly as optimistic as we should be.
I think it's I think it's easy to get bogged
down in the day to day minutia of the news
cycle of even some legislative or prosecutorial failures in this

(19:46):
space and think to ourselves that we're not making nearly
as much progress as we should be. In a certain sense,
that that's right, there's still far more work to be done.
But if you broaden the scope just a little bit,
even limiting to the last eight or ten years, the
prog has been absolutely remarkable. I mean, it's absolutely fair
to say we have seen just as much progress in

(20:07):
the broader anti corruption, counter cleptocracy, even frankly anti authoritarian
space over the past few years, as much as anything
we've seen in other periods of American history. And it's
certainly possible that when this is all said and done
in this chapter of American history, this will be the
most successful single era that we have ever seen in
terms of specific pieces of regulation, specific pieces of legislation,

(20:31):
to say nothing of the rise and the awareness of
the broader American body politic. And as you said, it's
been a confluence of factors. It's the shifting geopolitical reality,
the elevation of new malign threats out of places like Russia,
China and Iran. It is the revelation of things like
data leaks like the Panama Papers or the Paradise Papers,

(20:53):
finally exposing how some of these transnational networks operate. And
of course it has been the bipartisan consent is that
folks like Scott and his allies and Washington have been
helping to build up for years and years. You know,
if you take any one of those away. We may
not be where we are right now, but at the
end of the day, we have to remind ourselves. And
again why I'm grateful to you having conversations like this

(21:15):
with you today that we have absolutely seen remarkable progress
and the momentum continues.

Speaker 1 (21:24):
Yeah, anti corruption and transparency efforts are really a weapon
that democracies can use against rogue influence, against dictators. And
this question about how we turn transparency from just being
a shield for democracy into a sword is really important.
And transparency, I think, is about the open and free

(21:48):
flow of information, something that's very important for industry and
trade just as much as good governance. So how do
we in case maybe this is a question for you,
how do you think we should bring the private sector
on board with the importance of this idea of radical
transparency transparency as a sword, similar to how we needed

(22:09):
to do that bring companies into compliance after the FCPA
was passed, and of course that took a long time.

Speaker 3 (22:16):
Well, I think the private sector is actually an ally,
even if they haven't realized it yet in this fight.
And I think the SCPA example is actually illuminating because,
as you mentioned earlier in the conversational, in the mid
nineteen seventies, the American private sector still viewed bribery, which

(22:37):
outright bribery of foreign officials if you did it, as
business as usual. If I remember correctly, in other Western
jurisdictions at the time, these kind of bribes of foreign
officials could even be used as a tax write off.
I don't remember if that was a case in the
United States in particular, but again it was so there
we go, right, So it was again very much seen

(23:00):
as business as usual. And of course there was significant
private sector opposition to the FCPA itself. But what ended
up happening is once that legislation was passed, once it
was on the books, the private sector in the United
States of America realized that that was not just a
shield for themselves, but a sword as well. That is

(23:21):
to say, it was a potential element of appeal for
foreign governments, foreign officials, and foreign polities and foreign jurisdictions
that could now look at American companies and look at
the American private sector and know that they were doing
business above board. They were not helping entrench corrupt officials,
they were not engaging in back room, backhanded deals, and

(23:43):
that made American commerce that much more appealing for foreign clientele,
to say nothing of the domestic impact in the United
States of America. Again, that's just one example of many
that you can point to. Of course, at the end
of the day, the private sector has to be one
of the key partners in this fight, because without their
support and without their compliance with these laws and regulations,

(24:04):
then these laws and regulations are not going to be
worth the paper that they are written on. But I'm
reminded as well. You know, we talked a moment ago
about the initial burst in the early two thousands of
anti money laundering regulations in the American banking sector, and
there was, to an extent, if you'd like to call

(24:27):
it as such, a burden placed upon the American banking
sector to comply with new anti money laundering regulations, the
setting up of compliance departments, the filing of suspicious activity reports,
so on and so on. But of course, one of
the impacts of this was taking a significant step toward
cleaning out the tsunami of dirty money that had been

(24:49):
flooding the American banking sector, but as we saw it
most recently, also turning the American banking sector into allies
in the fight for further anti money laundering reforms elsewhere
so that they did not have to shoulder the burden
of anti money laundering compliance themselves. If I remember correctly,

(25:09):
the American Banking Association was one of the key allies
in the passage of the Corporate Transparency Act itself, saying
that this has been an effective piece of compliance that
we have dealt with. Now it is time for the
rest of the American private sector to follow suit as well.
So again, it's about building these alliances, building this momentum

(25:30):
to bring more and more elements of the private sector aboard,
to bring these allies aboard, even if they don't quite
realize their allies just yet.

Speaker 2 (25:38):
Let me add to that too. So you know, one
of the maybe top five most important news developments on
this issue set in the last five years or so
happened last Friday when TD Bank, Canada's second largest bank,
America's ninth largest bank, was publicly that they are paying

(26:00):
a three billion dollar settlement to the US Treasury and
Justice Departments because they failed to adequately comply with the
Bank Secrecy Act they did not have adequate anti money
laundering provisions in place. You know, it essentially showed that
they helped launder six hundred and seventy million dollars four

(26:21):
hundred and seventy million from a single criminal network. We're
originating out of China, three different drug trafficking organizations, with
money going to Columbia, Mexico, China. I mean, it is
I think, by far, the largest settlement that the US
government has ever had with a bank or another financial

(26:41):
institution in the United States. It is also the first
time in history that a bank pled guilty to conspiring
to launder money. The reason that we have the Bank
Secrecy Act is so you have that additional level of
control and oversight. It says to banks, you have to
collect this information about your clients, you have to form
due diligence, you have to affirmatively make sure your clients

(27:03):
are not using you to launder money. But this went
way deeper than that. It said that these folks were
essentially knowingly engaging in activity that at a high likelihood
that they were laundering money for folks. That's the foundational
money laundering law that we've had on the books for
you know, all the time essentially in the United States.
That's how far this bank went. And so when we

(27:24):
talk about participation in the private sector. You know, TD
Bank disclosed in one of their quarterly filings that there
was an investigation going on from the DOJ and the
Treasury Department. It was sort of buried in their disclosure
to investors that they have to do to the SEC.
They have to say anything that's material, you know, to
their business structure and their potential profits and whatnot. But

(27:48):
I'll tell you, when you have a three billion dollar settlement,
their stock took a tremendous hit. You know, the confidence
that investors have in this company's ability to turn them
to profit for you know, customers in the bank to
be a to rely on them. Casey is exactly right
that through things like the FCPA and now FIBA, folks,
especially international stakeholders, know that when they're doing business with

(28:11):
American companies that are subject to these rules and the
rules worked in this case, that they can deal on
a fair playing field and that there will be integrity
and ethics baked into those relationships with American companies. That
is going to make the investment community much more confident
and steer their dollars toward American companies as opposed to say,

(28:34):
any Chinese bank which has never been hit with a
violation of their correlative anti money laundering laws. There has
never been an FCPA case brought in China against a
Chinese company, even though they have these laws on the books.
I think it's pretty clear if you're a foreign investor
where you'd.

Speaker 3 (28:49):
Want to put you on Scott.

Speaker 4 (28:50):
I should ask that the lack of prosecutions or investigations
in China is that because every single Chinese entity is
operating above board and none of them are, for instance,
bribing foreign politicians, are engaged in money laundering.

Speaker 2 (29:02):
That's exactly right. Yeah. I think it's funny that the
same strategy that the US government can use to go
after the financing of corrupt governments like China is much
of the same strategy we used to go after organized
crime back in the fifties and sixties and seventies. I mean,
they knew that we may not be able to catch

(29:23):
them red handed engaging in the criminal acts themselves, but
if they were able to cut off the financing to
those organizations, they could dry them up. It's the same
story with large scale criminal organizations like the CCP.

Speaker 3 (29:34):
Yeah, and in that sense, it's no surprise that so
many of these authoritarian, dictatorial, coleptocratic regimes do resemble organized
crime mafia of previous eras in how they operate and
of course, how they launder their money as well.

Speaker 1 (29:48):
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(31:17):
dot Co. That's Hummingbird dot Co. We just had a
conversation with Ray Donovan on episode two of Course of Capital,
former special Agent in charge with the DEA and really
the DEA's lead man on the fentyl epidemic, and we
talked a lot about the money laundering networks behind the

(31:38):
fentanyl challenge. And these are very, very sophisticated organized criminal
networks in China, also operating in the US, operating in Mexico,
engaging with Mexican cartels and using the North American banking
system very effectively to launder the proceeds. And you know

(31:59):
that's also I think a thread going back to the
t D case UH and where we may see some
interesting uh you know, investigations and UH and and evidence
of the connectivity between UH banks here in North America
and what's happening in China. But I will say it's
been very difficult, I think for the US to get

(32:22):
visibility into the Chinese banking system, for example, and certainly
almost impossible to work together right to identify these rogue actors.
Obviously their incentives may be a little bit different than
than ours. So UH, it's it's complicated, but it really
I think brings brings the point across that we're living

(32:44):
in a complex global financial system UH, with lots of
players using this system, and we have more ways and
more tools where we could we could tighten it up.
UH and certainly prosecuting those that are not doing what
we need them to do is going to be a
key part of that, if.

Speaker 2 (33:02):
I could just say so. There is a lot of
understood frustration that the United States can't do more to
leverage in its allies political will against state actors like
China who I think are knowingly I think it's a
part of state warcraft that they are allowing the financing
of these opioid trafficking rings and networks to go through
Mexico into the United States. I mean, that's a known

(33:25):
criminal fact for their leadership there. But a lot of
folks may be frustrated that we can't do more against
China directly. But this is where something like the Enablers
Act comes into play. There were American based American citizens
who set up shell companies that allowed the Zaying opioid
trafficking ring in the United States to distribute fentanyl and

(33:46):
opioid synthetics across I think three dozen different American states.
There was a lawyer in Texas who used his law
firm account to launder what he believed where drug trafficking proceeds.
I mean, these are folks that are under the jurisdiction
of American law and the DOJ. And if we give
them the tools to go after our own vulnerabilities, our

(34:09):
own if you will, accomplices inside the United States, that's
another significant way that we could take a piece of
this out. And it doesn't require the foreign relations aspects
that we do when we think about dealing by latter
with China.

Speaker 3 (34:21):
And again, as Scott just said, the financial secrecy architecture
of those specific drug money laundering cases are identical to
the broader array of more traditionally kleptocratic money laundering networks themselves.
Whether it is the shell company formation, the usage of
lawyers and law firms, eventually the destinations of things like

(34:42):
real estate or private investments or trusts, or the art market,
auction houses. The list goes on and on. These networks
all rely on the opacity the financial secrecy that has
been provided and protected in spades by the United States
of America and its allies for years and years, and
as we know, increasingly every single day, have been taken

(35:03):
advantage of by whether it's the transnational drug networks or
the transnational kleptocratic networks. This is all dirty money looking
to be washed clean, and all too often happening right
here in the United States of America.

Speaker 1 (35:17):
Yeah, absolutely, Casey. I want to get to your new
book in just a minute, but maybe one more question
for Scott before we transition over to talking about foreign agents. Scott,
what keeps you up at night when you think about
the corruption challenge where we need to go, all the
efforts that are underway. What worries you the most?

Speaker 2 (35:43):
I suppose this is a good segue into the topic
that we're about to have. But I do worry that
there is a decreasing resiliency and pushback amongst American elites
in our political and economic systems to not fal sway
to these short term results pull of authoritarian governments and

(36:07):
authoritarian impulses inside the United States. I think it is
often a path of these resistance for these folks to
think I can bend or even break the rule of
law or norms sometimes as we'll talk about, in service
of literally in service of other countries, but in order
to achieve their own political ends, you know, more quickly,

(36:31):
and that you know, perhaps declining resiliency for us to
assert the importance of the rule of law and the
power of a system that is based on law and
you know, unbiased opinions. Is That's what's most concerning to me,
is that that half has always been a threat for

(36:54):
the United States. But there are signs here and there,
just to name it. Most alarmed lay the conflicts over
who won the twenty twenty election that we still have
not been able to finish litigating. Once we start disagreeing
about those bedrock principles of American democracy, Boy it opens
the door to bending and breaking all sorts of understandings

(37:18):
and rules that we have for how we govern ourselves.
And I'm concerned that the short term results and the
very discrete political benefits that people get from bending those
rules is going to grow into something that we can't stop.

Speaker 1 (37:35):
So yeah, thank you. Yeah, And this is why the
foundation that we're talking about building the structure, closing the loopholes,
you know, increasing the enforcement efforts, all of these things
have to happen in tandem to reinforce the structures and
make sure that we still have a foundation right for

(37:57):
building on that. And it's going to become very difficult,
I think if we, you know, if we move away
from these core principles around transparency. So yeah, that's something
I think we all need to keep our eyes on. Casey,
I'd like to turn to you now to talk about
the new book Foreign Agents. For all our listeners who

(38:18):
have not yet read the book, I highly recommend it.
It's a great read. It's an entertaining read for a
heavy topic, and I think it's a book that needed
to be written. So I appreciate that very much. So
maybe tell us a little bit about what compelled you
to go down this pathway of writing this book and
what sorts of risks are we really talking about in

(38:40):
the context of foreign agents that have influence in our
political and even economic systems in the US.

Speaker 3 (38:48):
Sure, thanks Ellie, and thank some of the kind words
about the book as well. Hopefully there's a little bit
of entertainment, maybe even fun in a book about such
a depressing, distressing topic. The book itself is an example
nation of the United States's foreign lobbying industry. This is
predominantly the American firms and figures that act as lobbyists

(39:09):
in Washington, d c. And around the country on behalf
of not other American constituents or American clients, but increasingly
foreign governments and especially foreign authoritarian regimes and even foreign
dictatorships and their kleptocratic allies and oligarchic proxies. I wrote
the book because this is an industry that is now

(39:30):
worth billions of dollars, and, as I argue in the book,
is presenting increasing threats not only to democratic movements around
the world, helping entrench anti democratic and authoritarian regimes in
country after country, but also is increasingly presenting a threat
to America's democratic bedrock as as well. It is an

(39:51):
industry that has been in the news in recent years
far more than it had ever been previously. This is
an industry that's been around for nearly a century a
this point, but because of the rise of figures like
Paul Mannifort, who was Donald Trump's twenty sixteen campaign manager,
and a number of others in his inner circle, as
well as a spate of recent prosecutions, including right here

(40:15):
where I'm calling in from New York City, where our
dear mayor was recently indicted on what are for all
intents and purposes, for lobbying related charges. It is an
industry that has been in the news far more recently
than it has been previously, and I thought the time
now was right to write a full sale, history, examination,

(40:35):
and investigation of the book itself. It touches on the
PR industry, the law firms, the consultancies, the think tanks,
and the universities that are really undergirding the foreign lobbying
sector in the twenty twenties in modern America. But as
you asked a moment ago, that the kind of threat
that this now poses, and this is what I wanted

(40:55):
to build off of Scott's comments these kind of again
core bedrock principles of America and democracy at large. One
of those being elected members of Congress or elected members
of whatever legislative bodies, are according to basic democratic principles,
supposed to be responsive to their constituents, whether it is

(41:15):
in the state they represent, the municipality they represent, or
of course in the executive branch the country that they represent.
But as we have seen in recent months, that is
no longer the case in the United States of America.
And to bring things into the foreign lobbying sector, we
have now seen for the very first time in American
history nearly two hundred and fifty years, both the indictment

(41:38):
and the conviction of a sitting member of Congress on
foreign agents and foreign lobbying related charges. That was the
recent conviction of Senator Bob Menendez from the Great State
of New Jersey, who, as a jury found, was no
longer responding and responsive only to his constituents in New Jersey,
but was conspiring to act as a fully or an

(42:00):
agent for the dictatorship in Egypt. He was accused of
an array of crimes, secretly lobbying his colleagues, hiding gold
bars and then googling how much a gold bar is worth,
and engaging a number of other crimes that he never
bothered to report to the Department of Justice, but of
course was never supposed to be allowed to conduct in

(42:21):
the first place as a sitting member of Congress. He
was found guilty on these charges just a few months
ago and has now since resigned his position. But I
suppose what's most heinous about that example is that, again
he was not just some freshman legislator who didn't know
what he was engaging in. He was the chairperson, He
was the chairman of the Senate Foreign Relations Committee. He

(42:45):
was the single most powerful senator as it pertains to
creating and crafting American foreign policy. And he was and
is now a convicted a foreign agent on behalf of
a foreign government. And there's another case out of the
House of Representatives as well that is ongoing. That is
a gentleman named Henry Quaar who's indicted on acting as

(43:07):
a foreign agent for the government of Azerbaijan. Again, unprecedented,
uncharted waters of members of Congress completely abnegating, completely abandoning
their basic core democratic principles of supposing to be supposedly
being representatives of their constituents, when in reality they are
either accused or convicted of acting on behalf of foreign dictators.

Speaker 1 (43:31):
So let me ask you this casey, are we talking
about an existential threat to democracy in America when we
think about the foreign agent problem? Or is this a
manageable problem? And if it's manageable, what can we do better?
If it's existential, how should we be reordering government and
alliances to address these threats?

Speaker 3 (43:53):
You know, Lee, if you'd asked me that question even
a year ago, as I was finalizing the manuscript for
the book, I would have said that this is perhaps
not a manageable problem in so far as it will
ever be fully tackled, but something that doesn't necessarily threaten
the sanctity of American democracy or American elections, or even

(44:14):
American policymaking writ large itself. But given the conviction of
a figure like Senator Bob Menendez, who again is the
single most or was the single most powerful figure in
American politics outside of the presidency, in the executive branch
in terms of crafting American foreign policy and even American

(44:34):
grand strategy itself, if a figure like that can be targeted.
If a figure like that can be flipped, and if
a figure like that can be secretly working at the
behest of again, not a treaty ally of the American government,
not a democratic ally of the United States of America,
but a military dictatorship who has any number of counter

(44:59):
vanl or opposed foreign policy principles to the United States
of America. If they can flip a figure like the
chairman of the Senate Foreign Relations Committee, then as far
as I can tell, any regime of that stature should
feel confident they can flip any American legislator, at least
outside of the executive branch itself. And that, as I
would argue, does represent an existential threat to the United

(45:22):
States of America and at least, at the very least
to American foreign policy writ large. Because if a figure
like that can, like Bob Menendez, can be bought by
a government in Egypt, and again we're not talking about
the Russias or the China's, who have even deeper pockets
than the Egypts of the world. If a figure like
that can be found out and convicted of secretly working
on behalf of Egypt, then there is every reason to

(45:45):
think that any other legislator can be bought and their
price can be met as well. So in that sense, yes,
I do increasingly view it as, without hopefully sounding too
histrionic or too hyperbolic about it, an existential threat to
American democracy written large. Now, there are plenty of regulatory, legislative,
prosecutorial uh decisions and priorities that canon absolutely should be pursued.

(46:08):
Of course, on the one hand, simply prosecuting these cases,
the fact that the Department of Justice under democratic administration
was willing to go after a Democratic member of Congress
is a wonderful testament to the sanctity of the American
democratic experiment writ large. And the success of that case
is absolutely a shot across the bow to other similar

(46:30):
networks elsewhere.

Speaker 1 (46:31):
Uh.

Speaker 3 (46:32):
You know, enforcing things like the Foreign Agents Registration Act
is absolutely a must as well as increasing it's the
civil liability penalties as well, so they don't have to
be convicted of crimes, they can get civil penalties, which
are financial or civil injunctions. Forcing the registration of some
of these foreign lobbying networks, I mean, they're they're they're

(46:52):
a whole array of potential fixes that will go a
significant way towards clamping down at these networks. But uh,
you know again, I am increasingly of the opinion that
time is running late, and the quicker we can get
these legislative solutions, regulatory solutions in the better off we
will all be both of the United States of America

(47:13):
as well as around the world.

Speaker 1 (47:15):
Scott, do you want to weigh in on this? Are
we talking about an existential threat?

Speaker 2 (47:20):
Well, first, I want to commend Casey and his publisher
for their oppressians in being able to predict what has
to be the single high profile, most high profile indictment
in American history against a sitting politician in Mayor Eric Adams.
On the back of the single highest and Casey, I
totally agree with you, most consequential indictment, prosecution, and conviction

(47:45):
of a sitting member of Congress, I mean, those are
this is just an incredible fact pattern. But so widen
the lens a bit. I think the concern over this
has been steadily building for the greater part of two decades.
I remember in twenty ten on the heels of the
Citizens United decision where the Supreme Court said that corporations
can spend unlimited amounts of money in our elections because

(48:08):
they are essentially people and so have the same First
Amendment rights as people. Then President Barack Obama said in
the State of the Union address that it had opened
the door for foreign influence. This is famously when Justice
Samuel Alito mouthed the words no it doesn't or no
it didn't, but you know, President Obama was correct. This
means that companies, even American subsidiaries that have significant foreign

(48:33):
ownership five, ten, fifteen, twenty percent, you know, held by
foreign nationals, can spend as much money as they want
influencing our elections, something that is obviously illegal. If you're
a foreign national citizen of another country, you can't spend
a dime on elections. And yet you could create a
subsidy here. And you know, presumably you're spending money that
is raised in the United States, and the foreign nationals

(48:54):
don't have control about that. But all money is fungible
in corporations, it's interchangeable if folks want to, and of
course they do spend money like that. I think in Seattle,
for example, Amazon spent tens and hundreds of thousands of dollars,
you know, impacting their city council race, you know, levels
of foreign ownership in that company, which fluctuate every day.

(49:17):
But from there, I mean, look at all the concern
that we had over Russia's you know, spending of one
hundred thousand dollars on Facebook ads, which were not illegal
at that time because while they reference candidates by name
calling Hillary Clinton Satan, for example, it was outside those
windows close enough to the election where American law regulates that,

(49:39):
and because we don't have these kind of campaign finance
transparency disclosure laws for Facebook ads, you know, they were
allowed to engage in this activity. Fast forward a couple
of years and we see, you know, the President's son,
Hunter Biden, getting tens of thousands of dollars from Ukrainian
oil company, tens of thousand dollars a month, with the

(49:59):
skill set that he never developed and certainly didn't have
to warrant that kind of payment. People perceived that as
attempting to influence the White House. Now you've got these
high level indictments and convictions. The story is going on
and on. I do agree that this is a much
bigger problem. I think it's going to only become a

(50:19):
bigger problem, but it is manageable to the sense if
there's real bipartisan support for ways to address this, and
we can get into that.

Speaker 3 (50:28):
Say, just to jump on what Scott said a moment ago,
of course, I do take full credit for all of
the successes we have seen in this, but no, not
not at all.

Speaker 2 (50:37):
Want to know who your mole is at the That's
who I want to know.

Speaker 3 (50:40):
As as famous American philosopher Yogi Barrow once said, sometimes
it's better to be lucky than to be good, and
I can certainly can certainly a test to that. But no,
I was going to say, just to that point, the
money is fungible. Point. One thing I did want to
flag that was still one of the most surprising, shocking
concerning element of this broader foreign lobbying and foreign finance

(51:03):
space is the fact that these American foreign lobbying firms,
the pr shops, the law firms, increasingly, the consultancies and others,
as well as the traditional lobbying shops who represent foreign regimes,
foreign governments, including many authoritarian regimes, and who directly lobby
American officials themselves, there is no restriction whatsoever, aside from

(51:27):
the basic donation caps themselves, for how much money they
can pour into American elections and American campaigns. So if
you just think about that for a moment, this is
these are Americans, American lobbying firms that are taking money,
hand over fish from foreign governments, foreign regimes, and foreign
oligarchs and then can take that money and of course
do whatever they would like with it, whether it's paying themselves,

(51:50):
paying for media campaigns, so on and so forth, or
taking that money and immediately directing it or redirecting it
into financial into financing com political campaigns themselves. That we
don't have any evidence of specific contracts or specific emails
or x regime or why oligarch says I'm sending you
this money in order for you to give it to

(52:12):
ex candidate or why candidate. They're a little bit generally
wiser than simply putting it in writing. But again, I
do think the financing structures speak for themselves, because sometimes
we do see this money flowing even on the same
exact day that either the donations or the meetings with
these foreign official or excuse me, the domestic officials are
taking place. It is one example of many in which

(52:35):
the scandal is not even necessarily what is illegal, but
what is really legal at the.

Speaker 2 (52:40):
End of the day, and let me just make player
for folks. So it is illegal under federal law for
a foreign citizen, a foreign national to give money to
a candidate for federal office, for state office, for even
local office. It's one of the most bulletproof laws that
we have. But his case, he says, if you work
for a co operation, if you are a lobbyist and

(53:01):
your clients who are paying your bills is a foreign
government or foreign nationals, they're paying you a salary, and
that money becomes fungible when it comes into your bank
account for you know, whether your other sources of income
or whatnot. And then you, as an American citizen, are
obviously able to donate thousands of dollars to each and
every federal candidate for office. It's the same thing with

(53:25):
corporations here in the United States. They can and often do,
form corporate packs where their employees get together, they pool
the money that is often provided by their corporate salaries,
and then they donate that directly to candidates or to
packs that support those candidates. It's also incredibly difficult for
the public to know whether dark money groups, which have

(53:45):
spent billions of dollars on American elections since being empowered
by citizens United is coming from foreign sources because the
public never sees where those donations are coming from. It
used to be the case that at least those dark
money groups had to report it privately to the I
R S. They don't even have that requirement anymore. So
with all the mud slaying that we see a couple

(54:06):
of weeks ahead of the election, the American company public
simply does not know.

Speaker 1 (54:11):
Yeah, and I think if they did know, they'd be horrified.

Speaker 2 (54:14):
You know.

Speaker 1 (54:15):
That's Uh, that's why we have to keep talking about
these issues and making the connections between you know, the gaps,
our legislation, UH Supreme Court decisions, the real impacts. UH.
You know that are felt, you know, sort of all
throughout the system. But you know, it's not just the US.
I think a lot of other countries face similar issues.

(54:39):
I'd love to ask you both, maybe Casey's starting with you,
are there novel or effective means of addressing some of
these risks, particularly around foreign agents and the inflow of
UH funds through those agents, UH, that we should be
thinking about. I mean, is there is there an international
gold standard out there that that you came across when

(55:02):
you were doing research on your book, and how should
democracies be learning from each other.

Speaker 3 (55:07):
Well, interestingly, in the foreign lobbying space, it is the
United States of America that is the gold standard, and
it has been the golden standard since nineteen thirty eight
when the Foreign Agents Registration Act was first passed. Now again,
as I mentioned earlier, similar to the FCPA, the Foreign
Agents Registration Act was on the books for decades but
was effectively forgotten. It was very much a backwater. No

(55:29):
one at DOJ, no one in the broader American body
politic paid any attention to it whatsoever. And it's only
in recent years that it's seen this kind of research
to importance. But in that research it's also returned to
the stature of being a model that it has always
been and that other countries and especially other democratic allies
can now look to. I mean, at a very basic level,

(55:50):
the Foreign Agents Registration Act does not make any foreign
lobbying illegal, does not ban any lobbying from Americans on
the ground who want to speak on behalf of it
and represent foreign governments and foreign regimes themselves and foreign
nationals themselves. That of course get paid in the process.
It simply requires the transparency for them to disclose what

(56:12):
they are doing and who they are doing it for
and how much money they are making along the way,
and then the American Department of Justice will disclose that
information to the rest of us. This is the gold standard.
This is the transparency model that other democratic allies are
now looking to as they begin implementing their own versions
of the Foreign Agents Registration Act. And they are starting

(56:33):
down this path. In Australia a few years ago they
implemented their first version of it. We have seen discussions
ongoing in places like Canada. The United Kingdom is going
to be implementing its foreign Influence Registration scheme that should
be coming online supposedly later this year, it might be
next year. At this point, the EU, as it is

(56:55):
unfortunately want to do, has been dragging its feet, but
they're at least nominally moving in the right direction. But again, Elaine,
this gets to what you mentioned at the end of
your question and how and why democracies can and should
learn from one another. They have to learn from one
another because at the end of the day, this is
the only way we are ever going to succeed in

(57:16):
pushing back against this authoritarian tide that has been creeping
ever closer to our shores and in many ways is
now inside our borders itself. Learning from the successes, learning
from the failures, learning from the struggles and the challenges
of one another is the only way democracies around the world,
including America's democratic allies, are ever going to begin restoring

(57:39):
and restoring their democratic tradientials, credentials, and shining light on
these foreign influence, foreign lobbying schemes, and writ large, these
foreign financing schemes themselves. You know, Scotts can speak more
to the kind of successes and the lessons learned and
the financial transparency side of things in terms of transnational
criminal networks, transnational cliptoc. But that is the only way

(58:02):
we're ever going to succeed. We do not operate, We
do not live in a vacuum. We have to look
to our partners, look to our allies for what success is,
what challenges they have seen in order to you know,
get our own country in order as well.

Speaker 1 (58:17):
Scott, did you run a weigh in on that?

Speaker 2 (58:19):
I mean, the good news is there has been a
lot of activity at the state level on this too.
So Minnesota became the first state, I think just last
year that banned foreign influenced corporations, so corporations that do
have that amount of appreciable foreign ownership from being able
to spend money on elections in their state. This was
modeled after a city level or an insett pass in

(58:40):
Saint Petersburg that I worked on about ten years ago.
Seattle passed one shortly after California has you know, someone
famously passed a ban on foreign companies or foreign national
spending on their ballot propositions. After I believe the Dutch
companies spent three hundred thousand dollars influencing a proposal in
Los Angeles. That tide is definitely increasing, which I think

(59:02):
is good. You know, Casey mentioned FARA does not censor
you know, foreign voices from being able to influence you know,
the political discussion and lobbying here in the United States.
I think it could. You know, there are certainly a
lot of other countries that have taken that for national security,
other reasons. We could strictly say, and there has been
some legislation in Congress. Look, if you're a foreign company

(59:25):
or a foreign entity, you have to go through diplomatic
or trade channels. You can't seek to influence American elections
and lobby in between those elections. They have to be
more overt. I think the US has so far chosen
the right path, but as Casey says, we don't have
a lot of models around the world to look to.
We actually engaged a law firm for our anti coruption

(59:47):
policy lab to look around the world for other examples
of countries that have any real limitations on especially high
level political officials, being able to leave their positions of
office and then go lobby on behalf of own country.
And we couldn't find a single one, you know, and unfortunately,
in many countries, lobbying in and of itself is illegal.

(01:00:07):
So one reform that I would point to which has
been really promising, is that about two years ago a
bipartisan proposal known as the Cardon Rish Rule was enacted,
and it basically says, if you are the secretary or
the undersecretary of the State Department here, you can never
lobby on behalf of any foreign government after you leave

(01:00:28):
that position. It also says if you're a Senate confirmed
person in the State Department. So think every ambassador the
folks who head up the different divisions and subjects of
the State Department. You have a three year with someone
as a cooling off period before you could do the same.
And when it comes to about half a dozen high
risk countries think China, Russia, Ron Syria, you can never

(01:00:49):
do that. It's a great start, bipartisan. You know, folks
understood the risks presented by these folks who are obviously
working in all parts of the world where they may
be subject to these temps pations. We need to harmonize
it across the entire federal government. We need to make
that the standard for every department, bureau, agency so that
leadership and positions of height influence of risk can't be

(01:01:10):
manipulated by problems.

Speaker 1 (01:01:12):
Yeah, I'm glad you brought that up. I think that's
it's kind of a no brainer that we should be
putting these sort of prohibitions in place and make that
distinction that you know, there's there's there's a limitation around
UH where public servants should take their expertise UH post
government and so interesting to UH to learn that there

(01:01:34):
really is no you know, gold standard outside of the US.
We know we have some challenges with our standards. But
I love the idea that we could really put all
of this work on steroids and look to some new
multilateral engagement to really try to take a bite out
of these problems together with our core allies. Because you know,

(01:01:58):
it really occurred to me the other day as I
was thinking about this podcast and how to approach these
issues that we spend so much money protecting our democracy.
You think about the investments we make in defense, the
investments we make in protecting our economy and strengthening our economy,
trying to help our companies do well. It's all taxpayer

(01:02:19):
money to strengthen the US and work with our allies
and keep the open, rules based system in place and
keep our country safe. And at the same time, the
front door is absolutely open to influence and for a
relatively small amount of money, our core values have been compromised.

(01:02:42):
So we need to close that door, and we need
to close it more generally, I think, for democracies. And
this is also I think an important part of this
concept that I've written about extensively around ally shoring, which
is about protecting critical supply chains and working on economic
integration with allies and partners, but really none of that

(01:03:02):
will work without the democratic framework around that structure and
having transparent, open, rule of law based approaches is what
makes all this work. It's what brings foreign direct investment
into countries and keeps it there. It's what will drive

(01:03:22):
a democratic framework and a strong economic system. So I
think there's a lot that we can do and a
lot more threads to pull on this conversation. Maybe I'll
ask you one final question to close out our discussion today,
which has been amazing, and that is for the next administration,

(01:03:43):
which will come in just in the next few months.
What are the one or two most important things that
need to get done on the anti corruption agenda? Scott,
maybe starting with you.

Speaker 2 (01:03:55):
Yeah, so I can think of I can think of four.
So one, we mentioned the Corporate Transparency Act that is
actively being implemented and stood up right now by the
Treasury Department. Most of the companies that will that will
have to report their beneficial owners have until January first,
twenty twenty five to do so. We've got to make

(01:04:15):
sure that that deadline is kept and that those companies
that fail to report their information where they willfully fail
to do what they know they're supposed to and they
don't that, you know, the law is enforced against them.
To ensure a culture of compliance. Second, we mentioned the
Enablers Act. We have got to give the Treasury Department
the authority to crack down on the lawyers, the accountants,

(01:04:38):
the corporate service providers, etc. Who are blindly being exploited
and the servicemen and the bag carriers for these corrupt
and other criminal regimes around the world. Third, we've got
to get greater funding for our financial cops on the beat,
that's the Financial Crimes Enforcement Network FINS and the folks
who are enforcing both of these rules. We've got to

(01:05:00):
get greater assets to our Klepto Captured Task Force in
the United States that has been going after Russian assets
that are the product of corruption and other realistic finance here.
And finally, I think we've really got to make sure
that when it comes to protecting our own democracy at
home and being that shining light for the rest of
the world, that we pass domestic reforms like the Freedom

(01:05:25):
to Vote Act, which would shine a light on dark
money in the United States and the John R. Lewis
Voting Rights at to make sure that we are affirming
and protecting voting rights within our own country. Those are
the two proposals that have been listed by name by
Kamala Harris on the campaign trail. But these are things
that can and should be adopted by any future administration.

(01:05:46):
I'll add one more piece. When the next administration comes in,
no matter which candidate is on day one, they can
address this foreign lobbying issue by requiring all of their
employees to agree to an ethics pledge that says, on
your way out the door, you will not lobby, aid,
or consult any foreign government. You know, become a lobbyist

(01:06:07):
or a consultant for them at any point after your career.
The Trump administration had this on the books, Unfortunately it
was waived the day that President Trump left office. The
Biden administration was an even broader proposal on this. We
have to make sure that that standard, that precedent becomes
a strong norm and resilient norm for the next and
future administrations.

Speaker 3 (01:06:30):
Yeah. I'll just echo everything Scott said, and if folks
want to take a closer look into some of the
legislative and regulatory fixes, I cannot recommend enough going over
to Transparency International US Chapters website or contacting Scott directly
to ask for more information on any of these fixes,
which are absolutely each and every one of them worth pursuing. Again,
I think I don't know that I have necessarily much

(01:06:52):
much to add in addition to that, other than to
say it is about especially the enforcement of the laws
of the regulations that we already have on the books themselves. Again,
I've mentioned it a few times throughout this whether it
was with things like the Foreign Agents Registration Act or
even the FCPA itself, to say nothing of some of
the other loopholes that we've talked about already. Today, you

(01:07:14):
can have as many pieces of legislation, as many regulatory
fixes on the books as you want, But if they
are not being forced, if focus on the investigative and
the prosecutorial side are not being funded, and if there
is not an overall emphasis on that kind of enforcement itself,
then those laws and those regulations will not be worth
the paper that they are written on. They have to

(01:07:36):
be enforced, they have to be funded so that they
can live up to the potential that they have set,
not only here in the United States of America. But again,
if we are to act as the example as the
Gold Star or other democratic allies elsewhere. They have to
be enforced and funded so that other democratic partners can
also learn from and add to these successes themselves. And

(01:07:58):
of course, as I think Scott mentioned a moment ago,
you know, to turn things back to my first book,
which looked at the United States of America's role as
a center of transnational illicit finance and international money laundering.
For the next administration, I would love to see the
continuation of the rulemaking process for the real estate sector
and for the private investment sector, because those are two

(01:08:21):
key pillars that do remain in addition to the shell
company industry, which we've already seen successes in. If we
can tackle the real estate sector and the private investment sector,
then we will have gone far further than I ever
imagine in finally closing the door to the United States
of America as an offshore and money laundering haven. I
would love to see that finally happen.

Speaker 1 (01:08:42):
Combating corruption and its weaponization by rogue regimes must be
a permanent part of US national security policy. We spend
billions on defending our country, putting our military personnel in
harm's way, and shoring up our allies defenses, and at
the same time we'd leave the front door or open
to rogue influence at home and the weakening of democracies abroad.

(01:09:05):
I want to thank Scott and Casey for an insightful conversation.
We'll be discussing much more about corruption, foreign policy, and
the case for radical transparency in future episodes. I'm Elaine Tzenski.
This is coercive capital on the Illicit Edge network.